If you don't work for a rental car company, or you don't rent a car often enough, some of the Terms and Conditions may sound big and scary. It is safe to say most people just sign their agreement without looking at it thorough enough; it doesn't have to be like this!

Let’s go through some of the common New Zealand terminologies and hopefully you pick them up during your next rental car experience. Remember different rental car companies have their own policies and monetary value, so the intention of this article is only to help you to understand when you come across these jargons, allowing you to ask the right questions if required.

1. Insurance, Excess and Excess Reduction:
Over the years, we have picked up some of most commonly asked questions – how much insurance cover do I get? What is the liability amount in an unlikely event of accident? Let’s go through these terms one by one:

Standard Motor Vehicle Insurance – Sometimes known as Lost Damage Waiver. In Plain English terms this is your basic insurance cover. If your rental contract includes this “insurance”, then you are only liable to a fixed amount, say NZD$3000 New Zealand Dollars as oppose to the full price of your rental vehicle.

Excess – In Plain English, this is the amount you are liable for, sometimes known as “deductible”, or ”liability”. So from the above example with Standard Motor Vehicle Insurance, that NZD$3000 would be the “excess” as opposed to being liable to the full value of your rental car. Ask your rental car provider what items are covered; you would want to know if you are liable for flat tyre that needs replacement, or a broken windscreen etc.

Excess Reduction – Sometime being referred to as “additional insurance” or “full insurance”. What this really is, is an extra amount that you pay (usually per day) to reduce your “excess”. Using our example above with excess being $3000, going for “excess reduction” option will allow you to reduce the NZD$3000 down to say, NZD$300 or in some cases, NZD$0.

Still following? Great!

Expanding on this, you might wonder what happens if I made a minor ding or scrape that cost $200 to fix? Do I have to pay for the full excess? In most cases you don’t, do ask your rental car provider what their procedures are when you are involved in a minor accident, and how you will be charged.

2. Roadside Assistance Cover
This is sometimes being offered on top on your Standard insurance. In Plain English terms this is a form of additional insurance to cover your broken windscreen, lost keys, send someone to assist if you have flat tire/battery etc. For a fixed amount per day you will get extra cover for these items. Beware that the some policies only covers the cost of the “call out fee” but not the actual cost of…say the tyre. You know what to ask next time.

3. Prepaid fuel option
Sometimes being referred to “Pre-purchase gas option” or “PGO”. This means you agree to prepay for a full tank of gas at a slightly lower than market price. But remember if you have taken up this option, you will be charged for a full tank (depends on vehicle make a model) even you have only used less than a half.

4. Driver Licence requirements
You will need to carry a Full New Zealans Driver Licence or equivalent to be able to legally drive in New Zealand. If you are an international visitor and your licence is fully in English, then you are able to drive in New Zealns legally for up to three months from the day of arrival. If your original licence is in a different language, you will need to have it officially translated before arrival.

5. Make and model of your car
Most rental car companies sort their vehicle into “Car Groups". You can make the booking on a particular car group and receive a vehicle “or similar” to what's on the brochure. The reality is that it is unlikely that you get any guarantee to receive any particular make and model that you have requested at time of booking.

While the rental companies will do their best to fulfil your request, unfortunately if you didn’t get what you wanted then there won’t be much help to make a complaint. At the end of the day, you still get a good and reliable set of wheels that takes you from A to B right?